Directors and officers insurance – Recent critical issues in Australia and New Zealand

Directors and Officers Liability Insurance (“D&O insurance”) has grown and evolved rapidly over the past 80 years to assume an important position in most corporations’ corporate governance and risk management strategies. This article focuses upon certain topical matters of particular concern to directors and officers including the availability of defence costs where a D&O policy is subject to a statutory charge; the commercial desirability of stand-alone “A-side” coverage, being the cover provided directly to directors and officers for loss resulting from claims made against them for wrongful acts; the impact of fraud and/or dishonesty upon D&O cover; and disclosure of the nature and extent of D&O cover to the directors and officers themselves and to third parties – in the latter case such access frequently being necessary to determine the economic viability of pursuing a proposed action against a company and its directors and officers.

Managing uncertainty to improve the cost performance of complex infrastructure projects

There has been a recent spate of high profile infrastructure cost overruns in Australia and internationally. This is just the tip of a longer-term and more deeply-seated problem with initial budget estimating practice, well recognised in both academic research and industry reviews: the problem of uncertainty. A case study of the Sydney Opera House is used to identify and illustrate the key causal factors and system dynamics of cost overruns. It is conventionally the role of risk management to deal with such uncertainty, but the type and extent of the uncertainty involved in complex projects is shown to render established risk management techniques ineffective. This paper considers a radical advance on current budget estimating practice which involves a particular approach to statistical modelling complemented by explicit training in estimating practice. The statistical modelling approach combines the probability management techniques of Savage, which operate on actual distributions of values rather than flawed representations of distributions, and the data pooling technique of Skitmore, where the size of the reference set is optimised. Estimating training employs particular calibration development methods pioneered by Hubbard, which reduce the bias of experts caused by over-confidence and improve the consistency of subjective decision-making. A new framework for initial budget estimating practice is developed based on the combined statistical and training methods, with each technique being explained and discussed.

Social determinants of health and diabetic foot disease

Background Diabetic foot disease (DFD) is the leading cause of hospitalisation and lower extremity amputation (LEA) in people with diabetes. Many studies have established the relationship between DFD and clinical risk factors, such as peripheral neuropathy and peripheral arterial disease. Other studies have identified the relationship between diabetes and non-clinical risk factors termed social determinants of health (SDoH), such as socioeconomic status. However, it appears very few studies have investigated the relationship between DFD and SDoH. This paper aims to review the existing literature investigating the relationship between DFD and the SDoH factors socioeconomic status (SES), race and geographical remoteness (remoteness). Process Electronic databases (MEDLINE, CINAHL, and PubMed) were searched for studies reporting SES, race (including Aboriginal and Torres Strait Islander in Australia) and remoteness and their relationship to DFD and LEA. Exclusion criteria were studies conducted in developing countries and studies published prior to 2000. Findings Forty-eight studies met the inclusion criteria and were reviewed; 10 in Australia. Overall, 28 (58%) studies investigated LEA, 10 (21%) DFD, and 10 (21%) DFD and LEA as the DFD-related outcome. Thirty-six (75%) studies investigated the SDoH risk factor of race, 22 (46%) SES, and 20 (42%) remoteness. SES, race and remoteness were found to be individually associated with LEA and DFD in the majority of studies. Only four studies investigated interactions between SES, race and remoteness and DFD with contrasting findings. All four studies used only LEA as their investigated outcome. No Australian studies investigate the interaction of all three SDoH risk factors on DFD outcomes. Conclusions The SDoH risk factors of SES, race and GR appear to be individually associated with DFD. However, only few studies investigated the interaction of these three major SDoH risk factors and DFD outcomes with contrasting results. There is a clear gap in this area of DFD research and particularly in Australia. Until urgent future research is performed, current practice and policy does not adequately take into consideration the implication of SDoH on DFD.

Sport scandal and sponsorship decisions: Team identification matters

We conducted an experiment to investigate the impact of sport scandal on consumer attitudes toward a range of sport stakeholders. We examined the effects of fans’ social identity (fan of scandalized team vs. fan of rival team), scandal severity (single perpetrator vs. multiple perpetrators) and the sponsor brand’s response to the scandal (sponsorship retention vs. termination) on consumers’ attitudes toward the implicated team, the scandal perpetrators, the sport, and sponsor brand. We find evidence of differential reactions to scandal reflecting social identity, such that fans support their own team despite increased scandal severity but negatively judge a rival team’s transgressions. Results suggest that where fans are concerned, sponsors may be better served to continue with a sponsorship following scandal than to terminate, even for some forms of severe scandal. However, termination may receive more positive evaluation from rival team fans; hence continuation of sponsorship needs to accompany a tempered approach.